If you are a first-time Brookfield single-family rental property owner or are an experienced investor, you may have wondered if you should get your real estate license. As an investor, long-term success would depend on your ability to reduce costs wherever you can. You could also be thinking about the value of insider information, especially in competitive markets. If you believe that a real estate license will give you the savings and access you want, you might want to think it through first. There are both pros and cons to getting a real estate license and, as an investor, it is best that you consider this.
One major reason investors want to get a real estate license is to save on commissions. The thought of paying someone else a big percentage fee does not sit well with everyone. And, if you plan to sell a lot of properties — like flipping houses — you could save some money.
However, those savings are an illusion for Brookfield rental property investors who plan to buy and hold properties. The truth is that it is usually the seller who pays real estate agent fees, and not the buyer. It is also important that you realize that real estate agents are required to work under a broker who also requires a flat fee or a percentage of your commission from each transaction. These fees will further reduce any perceived savings.
Aside from saving money, investors are also attracted to access to the Multiple Listing Service (MLS) that a real estate license can give. This valuable resource for properties on the market is a much-coveted service. The free version of the listing service does not provide the comprehensive data that makes MLS access desirable to investors.
You might have to reconsider if gaining access to the MLS is your main reason for getting a real estate license. A licensee’s rental property could be subject to new laws that do not apply to private investors. Being a real estate agent also does not give you free access to the MLS. You also have to pay for the required licensing course, licensing test, and the license itself. Other costs include fingerprinting, brokerage fees, Association of Realtors dues, state fees, and so on. You also have to pay for the MLS. After all this, your real estate license could cost you thousands of dollars. Many of these costs are ongoing so that means you must factor them into your plans.
Finally, you must ask yourself how much your time is really worth. Can you afford to spend upwards of 100 hours taking a pre-licensing course and studying for the licensing exam? In many states, even the minimum number of hours required to certify can take months to complete. Getting a real estate license can take a toll on your already busy schedule running your investing business. In addition, every hour spent on licensing is an hour not spent on growing your investment portfolio. If you see real benefits in getting your real estate license, it still might be worth the investment in the short term. Crunch the numbers carefully and lay down your plans before jumping into something that may not give you your desired outcome.
Would you like to learn more about how to grow your Brookfield investment portfolio without a real estate license? Contact us online or give us a call at 630-427-2200.
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